China, Russia, Iran, Venezuela, India, Japan, Malaysia, France, Turkey, Saudi Arabia, United Arab Emirates, Brazil, Argentina, and South Africa: these are just a few of the growing cadre of countries joining the de-dollarization parade.
Whether through direct bi-lateral trade agreements, what to hold in fx reserves, currency swap agreements between central banks, or promoting the use of Bitcoin for everyday transactions, the world is rejecting the dollar-dependent U.S. centric order like I reject leftover clams.
Even U.S. states are getting in on the action by making gold and silver legal tender within their borders, removing sales taxes on precious metals, and going as far as to build state-run gold depositories with digital currencies issued on top.
The old center cannot hold.
And as Social Entropy drives political and economic power closer to home, the collapsing pillars of America’s exorbitant privilege will crush the U.S. government’s capacity to borrow, force massive inflationary devaluation through U.S. dollar exchange rates, and render America’s ability to perpetually engage in economic warfare obsolete
In place of exorbitant privilege, we will get exorbitantly high interest rates. And the last thing anyone should be holding right now is anything that promises to pay you back U.S. dollars in the future.
So ditch those bonds. And trade the dollars you get for assets situated far from the center.
Assets like gold come to mind. Bitcoin too.
And since nothing represents the dollar-centric world order better than cheap oil prices, resource plays like oil and gas stocks should do well as entropy continues to eat away at the center.
Take What the Market Gives You